Augmented and Virtual Reality in 2016

Paul Wroe

CEO & Founder

Written on:

October 17, 2015

Virtual reality and augmented reality are exciting – Google Glass coming and going, Facebook’s $2 billion for Oculus, Google’s $542 million into Magic Leap, not to mention Microsoft’s HoloLens. There are amazing early-stage platforms and apps, but VR/AR in 2015 feels a bit like the smartphone market before the iPhone. We’re waiting for someone to say “One more thing…” in a way that has everyone thinking “so that’s where the market’s going!”

A pure quantitative analysis of the VR/AR market today is challenging, because there’s not much of a track record to analyze yet. We’ll discuss methodology below, but this analysis is based on how VR/AR could grow new markets and cannibalize existing ones after the market really gets going next year.

AR is from Mars, VR is from Venus

VR and AR headsets both provide stereo 3D high-definition video and audio, but there’s a big difference. VR is closed and fully immersive, while AR is open and partly immersive – you can see through and around it. Where VR puts users inside virtual worlds, immersing them, AR puts virtual things into users’ real worlds, augmenting them.

You might think this distinction is splitting hairs, but that difference could give AR the edge over not just VR, but the entire smartphone and tablet market. There are major implications for Apple, Google, Microsoft, Facebook and others.